RealTime IT News

Stocks Cheer Greenspan Speech, But Nets Led Lower By Yahoo

Stocks rose on the belief that a speech by Fed Chairman Alan Greenspan signaled no imminent interest rate increases. But Internet stocks fell on worries about Yahoo's earnings report, due out after the close.

The ISDEX fell 10 to 709. The Nasdaq rose 32 to 4112, the S&P 500 gained 10 to 1485, and the Dow soared 10,778 on strength in cyclical issues, in the process taking out its 200-day moving average and the critical 10,700 level. Volume rose to 445 million shares on the NYSE and 770 million on the Nasdaq. Advancing issues led 14 to 11 on the Big Board and 19 to 17 on the Nasdaq.

Yahoo will kick off earnings season after the close, and Ariba will follow tomorrow. Juniper Networks will report on Thursday. The Producer Price Index for June will come out on Friday.

Yahoo continued to struggle, falling 8 1/8 to 101 7/8, after breaking key support at 111 yesterday. Analysts have been making cautionary comments about the company for weeks, based on weakness in Internet advertising. This morning, Morgan Stanley Dean Witter analyst Mary Meeker said the company may lower forward guidance and announce that it will increase spending. Lehman Brothers also reportedly made cautious comments on Yahoo. A technical comment on Yahoo: the stock fell out of a broadening formation yesterday. While this did not occur at a top, it nonetheless carries bearish implications, potentially signaling a decline to as low as 70, based on the size of the formation 110-150.

eBay continued to struggle since falling below critical support at 50, losing 3 9/16 to 44 1/2. DoubleClick fell 2 3/16 to 29 1/2, a new 52-week low.

Art Technology and competitor BroadVision continued to diverge, on news that Art had won a major contract from Kmart. Art rose 8 9/16 to 118 7/16, while BroadVision fell 4 5/16 to 35 9/16. Vignette fell 5 to 41 7/8.

Inktomi recovered 5 15/16 to 114 7/16, a day after falling sharply on news that Yahoo had completed its switch to Google.

Alteon WebSystems soared 28 1/8 to 129 1/16 after announcing that it will become profitable in the fourth quarter, three quarters ahead of expectations.

GoAmerica rose 9/16 to 13 3/8 on a Chase H&Q Buy rating and $30 price target.

DSL stocks rose after Morgan Stanley Dean Witter began coverage. NorthPoint Communications gained 1 to 13 13/16; NorthPoint has been the subject of rumors that WorldCom may be interested in acquiring the company. Covad rose 1 1/2 to 19 1/4, Network Access rose 1 1/2 to 11 7/16, and Rhythms rose 2 5/16 to 16 1/2.

VerticalNet rose 2 5/8 to 41 1/2. The stock has been the subject of positive analyst comments recently.

Fiber optics stocks continued to rise a day after JDS Uniphase announced it will buy SDL . Recent IPOs continued to rise on the news, with Sonus Networks bolting 23 1/8 to 172 1/8 and New Focus rising 13 1/8 to 112 1/8. Extreme Networks gained 8 17/32 to 120 17/32, continuing to rise on rumors that it would be acquired by Juniper , up 5 3/8 to 152 15/16.

Some technical comments on the market: A good day on the Dow: the index broke its downtrend in place since reaching 11,100 in late April, and moved above its 200-day moving average at 10,747, a level it has struggled with re